Blue Apron: Disruption in the U.S. Food Industry? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Blue Apron: Disruption in the U.S. Food Industry?
In late 2017, the newly appointed chief executive officer of Blue Apron, a pioneer in the subscription-based meal kit delivery service in the United States, faced several operational and revenue growth challenges. Since its inception in 2012, Blue Apron had invested heavily in marketing to acquire new customers, but rapid growth had led to challenges, and efforts to resolve those issues had led to further problems. Blue Apron also faced several operations and human resources challenges that had resulted in late and missed deliveries. Competition was fierce from both other start-ups such as HelloFresh and established retailers such as Amazon Inc. Could the new chief executive officer ensure that Blue Apron became profitable, or was the company destined to exit the market or be acquired by an established retailer? Arpita Agnihotri is affiliated with Pennsylvania State University - Harrisburg. Saurabh Bhattacharya is affiliated with Newcastle University.
Swot Analysis of "Blue Apron: Disruption in the U.S. Food Industry?" written by Arpita Agnihotri, Saurabh Bhattacharya includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Apron Blue facing as an external strategic factors. Some of the topics covered in Blue Apron: Disruption in the U.S. Food Industry? case study are - Strategic Management Strategies, Disruptive innovation, Financial management and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Blue Apron: Disruption in the U.S. Food Industry? casestudy better are - – increasing transportation and logistics costs, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, technology disruption, there is increasing trade war between United States & China, wage bills are increasing, increasing commodity prices,
cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Blue Apron: Disruption in the U.S. Food Industry?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Blue Apron: Disruption in the U.S. Food Industry? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Apron Blue, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Apron Blue operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Blue Apron: Disruption in the U.S. Food Industry? can be done for the following purposes –
1. Strategic planning using facts provided in Blue Apron: Disruption in the U.S. Food Industry? case study
2. Improving business portfolio management of Apron Blue
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Apron Blue
Strengths Blue Apron: Disruption in the U.S. Food Industry? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Apron Blue in Blue Apron: Disruption in the U.S. Food Industry? Harvard Business Review case study are -
Successful track record of launching new products
– Apron Blue has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Apron Blue has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Apron Blue digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Apron Blue has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Superior customer experience
– The customer experience strategy of Apron Blue in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Apron Blue has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Blue Apron: Disruption in the U.S. Food Industry? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Apron Blue
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Apron Blue does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Apron Blue has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Blue Apron: Disruption in the U.S. Food Industry? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Innovation driven organization
– Apron Blue is one of the most innovative firm in sector. Manager in Blue Apron: Disruption in the U.S. Food Industry? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Apron Blue in the sector have low bargaining power. Blue Apron: Disruption in the U.S. Food Industry? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Apron Blue to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Apron Blue is present in almost all the verticals within the industry. This has provided firm in Blue Apron: Disruption in the U.S. Food Industry? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Strong track record of project management
– Apron Blue is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Innovation & Entrepreneurship field
– Apron Blue is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Apron Blue in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Apron Blue are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Blue Apron: Disruption in the U.S. Food Industry? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Blue Apron: Disruption in the U.S. Food Industry? are -
Low market penetration in new markets
– Outside its home market of Apron Blue, firm in the HBR case study Blue Apron: Disruption in the U.S. Food Industry? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Apron Blue has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
No frontier risks strategy
– After analyzing the HBR case study Blue Apron: Disruption in the U.S. Food Industry?, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Lack of clear differentiation of Apron Blue products
– To increase the profitability and margins on the products, Apron Blue needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Apron Blue is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Apron Blue needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Apron Blue to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Blue Apron: Disruption in the U.S. Food Industry? HBR case study mentions - Apron Blue takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Blue Apron: Disruption in the U.S. Food Industry?, is just above the industry average. Apron Blue needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Aligning sales with marketing
– It come across in the case study Blue Apron: Disruption in the U.S. Food Industry? that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Blue Apron: Disruption in the U.S. Food Industry? can leverage the sales team experience to cultivate customer relationships as Apron Blue is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Blue Apron: Disruption in the U.S. Food Industry? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Apron Blue has relatively successful track record of launching new products.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Apron Blue supply chain. Even after few cautionary changes mentioned in the HBR case study - Blue Apron: Disruption in the U.S. Food Industry?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Apron Blue vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Apron Blue has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities Blue Apron: Disruption in the U.S. Food Industry? | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Blue Apron: Disruption in the U.S. Food Industry? are -
Learning at scale
– Online learning technologies has now opened space for Apron Blue to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Building a culture of innovation
– managers at Apron Blue can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Innovation & Entrepreneurship segment.
Creating value in data economy
– The success of analytics program of Apron Blue has opened avenues for new revenue streams for the organization in the industry. This can help Apron Blue to build a more holistic ecosystem as suggested in the Blue Apron: Disruption in the U.S. Food Industry? case study. Apron Blue can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Apron Blue can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Blue Apron: Disruption in the U.S. Food Industry?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Apron Blue can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Blue Apron: Disruption in the U.S. Food Industry? suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Apron Blue can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Apron Blue can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Apron Blue can use these opportunities to build new business models that can help the communities that Apron Blue operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Apron Blue can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Apron Blue can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Better consumer reach
– The expansion of the 5G network will help Apron Blue to increase its market reach. Apron Blue will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Leveraging digital technologies
– Apron Blue can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Developing new processes and practices
– Apron Blue can develop new processes and procedures in Innovation & Entrepreneurship industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Apron Blue to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Apron Blue to hire the very best people irrespective of their geographical location.
Threats Blue Apron: Disruption in the U.S. Food Industry? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Blue Apron: Disruption in the U.S. Food Industry? are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Apron Blue in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Apron Blue has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Apron Blue needs to keep up with the evolution of technology in the Innovation & Entrepreneurship sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Apron Blue will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Apron Blue in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Apron Blue can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Blue Apron: Disruption in the U.S. Food Industry? .
Environmental challenges
– Apron Blue needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Apron Blue can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Stagnating economy with rate increase
– Apron Blue can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Apron Blue needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Apron Blue business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Apron Blue with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Apron Blue is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Apron Blue high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Weighted SWOT Analysis of Blue Apron: Disruption in the U.S. Food Industry? Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Blue Apron: Disruption in the U.S. Food Industry? needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Blue Apron: Disruption in the U.S. Food Industry? is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Blue Apron: Disruption in the U.S. Food Industry? is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Blue Apron: Disruption in the U.S. Food Industry? is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Apron Blue needs to make to build a sustainable competitive advantage.